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Monday, 20 April 2009

The Alfa-Bank conference call for the announcement of the Full Year 2008 Results will be held on April 21st 2009, at 12.00 (London time), 15.00 (Moscow time). Andrew Baxter, Chief Financial Officer will present the results and take questions.The presentation will be held in English. You can download the presentation slides and audited financial report from our website at http://www.alfabank.com/investor/presentations/?new and http://www.alfabank.com/investor/financial_reports/financial_statements_ifrs/?new.Dial-in numbers for the conference call are: UK Access Number +44 (0)20 8609 0205 UK Toll Free* Number 0800 358 2705 US Toll Free* Number 1 866 793 4279 RU Toll Free* Number 810 800 271 83011 *If you are calling from a mobile phone your provider may charge you when connected to toll free number. Pin-code: 117390# You can find additional access numbers in the attached file. Replay: A replay of the conference call will be available for 7 days by phone starting from approximately one hour after the completion of the conference call: UK Playback Number 1 +44 (0)20 8609 0289 UK Playback Number 2 0800 358 2189US Playback Number 1 866 676 5865 RU Playback Number 810 800 2376 4011 Conference Reference 260834# For further information, please contact:Svetlana Demyashkevich or Roman TokarevInvestor Relations, Alfa-BankPhone: +7 495 795 36 41, +7 495 795 37 11E-mail: sdemyashkevich@alfabank.ru, rtokarev@alfabank.ru

A new global study of institutional investors, investment consultants and hedge funds released today by The Bank of New York Mellon and Casey, Quirk & Associates highlights the role of oil prices and high net worth investors in the continued growth in hedge fund investment across the Middle East region.

Entitled 'The Hedge Fund of Tomorrow: Building an Enduring Firm', the global study includes the following regional findings:

• The Middle East has not been a major source of outflows over 2008-2009, accounting for less than 3% of total global outflows. Redemptions were concentrated in the high-net-worth segments, both family offices and bank platforms.

The banks may be in the Q1 happy club, but that’s not so much the case for oil firms, and specifically the oil services firms, which this time last year happened to be the talk of the markets (see chart below).Oh, how things change. Halliburton, the second-largest oilfield-services provider, on Monday announced a 35 per cent fall in its Q1 profits on a decline in exploration and production spending linked to the fall in global oil prices.

In all, net income at the company dropped to $378m, or 42 cents a share, from $580m, or 63 cents, a year earlier. Consolidated revenue in the first quarter, meanwhile, was $3.9bn, down 3 per cent from the first quarter of 2008.

Quant funds, of course, who have been buried during the recent bear market rally according to Bloomberg.

Companies with the most debt and lowest returns on assets are turning the biggest six-week rally in stocks since 1938 into a bloodbath for last year’s best-performing trading strategy. Investors in so-called “quantitative momentum” funds –which speculate that the worst stocks in the past 12 months will continue to decline — have become this year’s biggest losers after banks and companies that rely on consumer spending surged. Quant momentum managers may have tumbled 27 percent this month in the U.S., the most since at least 1993, while those in Europe may have lost 20 percent in March and 24 percent in April, according to data compiled by JPMorgan Chase & Co.

At a time when maintaining positive financial results has become a challenge for most banks, Doha Bank recorded more than 20 per cent increase in its net profit for the first quarter of 2009 compared to the corresponding period last year.

Chief Executive R Seetharaman attributes this to a "balanced approach". While he stresses a unified approach to tackling the global crisis, implementing the G20 decisions would play a key role in determining the future course of events, he told Emirates Business.

Measures taken by governments to deal with the crisis have been appropriate, he said.

Heavy investments boosted the UAE economy by at least 20 per cent in current prices during the oil boom of the past eight years to catapult the country to the second largest Arab economy after Saudi Arabia, official figures have shown.

Cumulative public and private investment climbed a staggering Dh900.6 billion during 2001-08, more than double their size in the previous eight years, showed the figures by the Ministry of Economy.

The surge in investments, which were listed as gross fixed capital formation, was a result of a sharp rise in the country's oil export earnings and strong domestic demand which encouraged the private sector to invest heavily.

Will last Wednesday go down as the date of the beginnings of recovery in the Dubai financial sector? That was the day shareholders of Shuaa Capital took the decision not to drive the company into liquidation, which had been a valid course of action and one thrust on them for consideration by the regulator. Instead, the company was to carry on as a going concern.

It was not only Shuaa executives, employees and shareholders who breathed a sign of relief. The whole Dubai financial community should also take heart from the decision. Dubai has witnessed, and survived, its own “Lehman moment”.

Last September, US financial authorities faced a similar choice, but of a greatly different magnitude. Shares in Lehman Brothers, the 160-year-old blue-blood investment bank, had been on the rack for weeks as rumours swirled about the extent of its outstanding positions and potential losses in the market for collateralised debt obligations (CDOs).

DUBAI World, owners of the Victoria & Alfred Waterfront, in Cape Town, are going ahead with major investment projects in South Africa despite the global economic slump.

Billions of dollars’ worth of developments worldwide, including in South Africa, have been shelved by major developers.

But this week Dubai World chairman Sultan Ahmed Bin Sulayem said: “We are proceeding with new projects and investments. Our investments in South Africa continue to perform strongly in the current market ... and we are certain that our long-term investment vision in South Africa will continue to produce positive results.”

Rich Europeans, who were the first to invest in hedge funds and comprised the majority of investors, have been the first to exit in the downturn, according to a study by the Bank of New York Mellon and research firm Casey Quirk. High net worth individuals last year accounted for 80% - or more than $500bn - of hedge fund redemptions, although they only held two-thirds of the assets. The outflows were disproportionately European, the study found.

General Motors is prepared to part with a controlling stake in Opel/Vauxhall for nothing but a pledge to invest directly in a new company formed from its European operations, said people close to its plans. GM, which might file for bankruptcy in the US, was talking to more than six financial and industrial groups about acquiring a stake in its regional arm, Fritz Henderson, GM’s chief executive, said last week. It wants a firm indication of buyers’ interest in the next two to three weeks.

Russia came through last autumn’s liquidity squeeze better than expected. No large bank failed and the rouble’s slow-motion devaluation, though costly for reserves, prevented bank runs that would have evoked memories of its 1998 default. Now for the second wave. With the economy contracting, real incomes falling and joblessness spiralling, non-performing loans are set to mushroom. Could the ghosts of 1998 still stir?

Russian banks do not have the same US subprime-related toxic assets that laid low US and west European counterparts and did not ape the huge foreign currency lending of central European banks. Since credit demand in Russia, unlike in the west, exceeded supply even during the credit boom, banks could also be choosy in lending. NPLs could nonetheless rise to 10-20 per cent of credit portfolios, ministers and bank executives warn. Forecasting is complex because it is unclear how big the problem already is. Overdue loans have doubled in recent months to about 3 per cent, according to figures from Russia’s central bank. But these count only overdue interest and the overdue portion of loan principal; under international definitions, NPLs may be three or four times higher. Alfa Bank, Russia’s number two privately owned bank, warned last week that its overdue loans were nearing 10 per cent and provisions might wipe out this year’s profits; its president has said sector-wide NPLs could reach 20 per cent.

The ruler of Dubai said on Sunday the government may still have to intervene to offer financial support to some economic sectors in the troubled Gulf emirate, but he believes that “the worst is over and behind us”.

The acknowledgement by Sheikh Mohammed bin Rashid al-Maktoum of the impact of the financial crisis is a shift from his previous statements that the emirate has been unaffected by the global financial crisis.

Sheikh Mohammed, answering questions in his capacity as the prime minister of the United Arab Emirates, said the economy would face slower growth this year. But he insisted that the government's action to support domestic banks and its stimulus packages had helped the economy “shift...from the crisis mode to the solution”.

Dubai property prices have further to fall even after average residential prices have dropped by up to 42 per cent over the last six months, according to a property consultancy.

Colliers International said on Sunday that speculators had largely quit the Gulf market and debt financing was unavailable, leaving only professional investors. These, said Ian Albert, Colliers’ regional director, were demanding only “nearly-complete or income-generating” property and would not fund the off-plan projects that have driven supply and demand in much of the region.

Colliers issued a report on Sunday which said that residential rents in Dubai, the Gulf economy most correlated with the rest of the world, had dropped between 20 and 40 per cent over the last six months.